Cryptocurrency: “Matter serious, could encourage illegal transactions” RBI tells SC

Cryptocurrency: “Matter serious, could encourage illegal transactions” RBI tells SC

Murali Krishnan

The petitions in the Supreme Court seeking regulation of Bitcoin and other cryptocurrency in India have been listed for final disposal on September 11.

The Bench of Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud acceded to the request made by the petitioners and the Reserve Bank of India (RBI) that the matter requires to be heard without delay.

Senior Advocate Gopal Subramanium, appearing for the petitioners, stated that the matter is serious and should be heard and disposed of as early as possible.

He requested the Court to list the matter for final disposal.

Senior Advocate Shyam Divan, appearing for RBI, echoed the views of Subramanium and said that cryptocurrency could encourage illegal transactions.

“The policy of RBI is of extreme caution”, said Divan.

The Bench agreed to hear the matter and listed it for September 11 for final disposal.

The Court had earlier issued notice in the petition filed by advocate Dwaipayan Bhowmick, seeking directions to control the flow of cryptocurrency by forming a committee to frame an appropriate mechanism to regulate the same.

It is also averred that though Bitcoin does not fall under the definition of “currency”, it should still be regulated, since it is used in financial transactions.

The petition also states that some countries have made cyrptocurrency subject to their respective tax regimes, while others countries have designated it as a commodity, thereby making it subject to government regulation and accountable to the exchequer.

The petitioner, therefore, seeks that a policy be put in place to control the flow of Bitcoin and other cryptocurrency and to ensure that the same is made accountable to the exchequer.

Earlier this month, the Internet and Mobile Association of India (IAMAI) had moved the Supreme Court seeking a stay on the RBI Circular that effectively disallowed dealing of cryptocurrency.

The petitioner body represented by Senior Counsel Aryama Sundaram contended that the matter is of urgent nature, considering that the deadline laid down in the RBI Circular was July 6.

However, the Court refused to stay the Circular.

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